Thai Tobacco Trade Association and Retailers Take Ministry of Health to Court: "We Play by the Rules -- And So Should the Ministry"

The Thai Tobacco Trade Association (TTTA), which represents more than 1400 retailers across Thailand, announced today that it is asking the Administrative Court to invalidate the Ministry of Public Health's unconstitutional decision to impose new warnings on cigarette packages. An individual retailer and wholesaler are joining TTTA's suit, and Philip Morris (Thailand) Ltd. is also bringing a similar case. At issue is a Ministry notification that mandates graphic health warnings on 85% of the front and back of cigarette packs. This rule was developed behind closed doors to avoid differences of opinion, without the input of the thousands of retailers whom the rule will burden most, and without the legal authority to impose this controversial requirement.

Mrs. Varaporn Namatra, Executive Directorof TTTA said, "We asked many times, but the Ministry refused to talk with us even though this rule will make it harder for us to do our jobs. Everyone already knows that smoking is dangerous. Thailand already has some of the biggest health warnings in the world. I can't see why the new requirement is necessary, especially when it will just complicate the work of so many hard working retailers. We're just trying to make a living and we play by the rules, and so should the Ministry. No one should be able decide these kinds of things behind closed doors.We have rights – starting with a right to be heard – which is why we are now asking the court to step in."

TTTA expects that the regulation will lead to real problems for retailers, including:

Higher operational costs;

A likely consumer shift toward cheaper, lower-margin roll-your-own tobacco, which is not subject to the new warnings yet makes up about 50% of all tobacco sold in Thailand; and

New incentives for supply and demand in the black market to increase -- where products are less expensive to buy, highly profitable to sell, and often have smaller warnings or no warnings at all.

Retailers were not the only group who didn't have a voice in the notification. The process excluded key government ministries that should have been able to participate and closed the doors to adult smokers, wholesalers, distributors, manufacturers, importers and other parties that the requirement will burden.

Commenting on his decision to file a case, Mr. Danai Surawattanawan, a Chiang Mai-based wholesaler and the owner of Saha Karnka store said, "Government should listen to all sides of an issue before making decisions that hurt people like me.That's commonsense, but the Ministry didn't listen.It's trying to use powers that no one ever gave it. And it's making major decisions without working with other government ministries or talking to the small business owners that its policies burden. I am not happy that I have been treated this way. Having been denied a voice in the debate, the only choice I now have is to ask the court to help me."

The TTTA's case centers on the fact that the Ministry overstepped its authority under Thailand's Tobacco Product Control Act by issuing a notification that conflicts with higher law. It also violated Thailand's due process requirements because it excluded the public and those whom this requirement will impact from voicing their views and failed to adequately assess the potential negative consequences of the requirement. The cases will show that the notification is unconstitutional and disproportionate; prevents businesses from engaging in free and fair competition; and disregards trademark protections under Thai and international law.

Philip Morris (Thailand) Ltd. commented on its own filing:

"Given the negative impact that this policy will have on our trademarks and packaging, and the fact that the Ministry ignored our voice and the voices of thousands of retailers in enacting this rule, we have no choice but to ask the Court to intervene. Ultimately, this requirement is not about increasing the public's awareness of the risks of smoking -- which is universal. The Ministry exempts half of the tobacco products sold in Thailand from the new warning. How does that make sense? In our view, this is a punitive measure. The Ministry should have listened to all sides -- and respected the rule of law -- before imposing an illogical requirement that will change the marketplace so significantly," said Ms. Onanong Pratakphiriya, Manager Communications & External Affairs, Philip Morris (Thailand) Ltd.

The parties will file their lawsuits before July 4, 2013 with the Bangkok Administrative Court. A final result is likely within 10 to 14 months.

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The history of cigarette health warning requirements in Thailand:
1974: First text health warning required on the side panel of the pack without specified font and size
1989: 2*2 mm text health warning required on the front of the pack
1992: Text health warning required to cover 25% of the front and back of the pack
1997-2004: Text health warning required to cover 33.3% of the front and back of the pack
2005: Graphic health warning required to cover 50% of the front and back of the back (4th country in the world to require a graphic health warning)
2006: Warning must also cover 50% of the side panels of the pack
2010: Graphic health warning size increased to cover 55% of the front and back of the pack (9th largest in the world)
2011: Warning must also cover 60% of the side panels of the pack

About Thai Tobacco Trade Association:

Thai Tobacco Trade Association (TTTA) was established in January 2012 with the objective of reflecting the perspectives of tobacco-product retailers, wholesalers, and distributors towards tobacco-related issues in order to solve problems and concerns within tobacco trading industry. Topics will cover laws and regulations on tobacco taxation, illegal tobacco product deterrence, and other related campaigns such as youth smoking prevention and local CSR initiatives. Moreover, TTTA is a center of communication between tobacco business sectors and government and media. For more information, please visit http://www.ttta.or.th/english.php